Posts Tagged ‘China Observer’

Japan Halting Photoresist To China?

Saturday, December 20th, 2025

I haven’t been able to verify this yet, but according to China Observer, “Japan’s Ministry of Economy, Trade, and Industry may have escalated export controls on November 20-21, adding 12 types of core semiconductor materials and related services to its “End User List,” placing about 110 semiconductor-related entities from mainland China under heightened scrutiny. Mainland China is more than 60% reliant on imports for photoresist, with ArF/EUV almost entirely dependent on Japan and the Netherlands.”

Every time you pattern a semiconductor wafer via a lithography stepper, you first have to deposit photoresist across the entire surface of the wafer. Once you’ve done that, the lithography pattern projected on the wafer hardens, letting some areas get stripped away during etch to create the interconnect patterns for other processes to fill with circuits for the chips. Getting proper photoresist uniformity across the entire wafer has some technical challenges, but it’s something like ten orders of magnitude less complex than EUV lithography. But getting the formula for EUV photoresist exactly right, and then manufacturing it ultrapure in quantity? Yeah, that’s not exactly something you can do in a high school chemistry lab.

  • “The Japanese have directly pulled out of the entire photoresist business in China. 90% of the photo resist we use is imported, with 60% coming from four Japanese companies. Without them, we can’t operate in the high-end sectors. With Japan’s withdrawal of supplies, domestic semiconductor factories are in chaos. Production capacity is declining and yield rates are crashing. Once production lines stop, they lose millions of yen a day.”
  • “The entire semiconductor industry is suffering massive losses.”
  • “A blogger in one video pointed out that few people know that in China’s semiconductor industry, the true bottleneck isn’t the photolithography machine, but a small bottle of liquid costing 50,000 RMB: photoresist.”
  • Section on China having a hissy fit over Japan’s prime minister Sanae Takaichi stating that Japan would defend Taiwan in the event of a Chinese invasion (touched on in this LinkSwarm) skipped.
  • “Japan [quietly] and decisively retaliated. According to a report by Chinese media outlet East Money, Japan’s Ministry of Economy, Trade, and Industry may have escalated export controls on November 20th to 21st, adding 12 types of core semiconductor materials and related services to its end user list, placing about 110 semiconductor related entities from mainland China under heightened scrutiny.”
  • “Among the most notable measures are those affecting photoresist and photolithography machine after-sales services regarding photoresist.”
  • “Four Japanese companies (JSR Corporation, Shin-Etsu Chemical Company, Tokyo Ohka Kogyo Co., Ltd. and Fujifilm) have suspended deliveries of ArF [Argon-Fluoride laser] immersion and EUV photoresist to mainland Chinese customers while high-end KrF [Krypton-Fluoride laser] products have been significantly delayed.”
  • “Mainland China is more than 60% reliant on imports for photo resist, with ArF UV almost entirely dependent on Japan and the Netherlands.”
  • “Canon and Nikon have informed their Chinese customers that, starting in November, the supply of certain DUV photography machine parts and on-site maintenance services will depend on export licensing conditions. Currently, China has over 1,200 DUV photography machines, 90% of which depend on Canon and Nikon for after sales service.”
  • ” After Canon and Nikon further restrict services, China’s stock of spare parts for photography machines will only last about 3 to 6 months, with photoresist being one of the most critical components.” Well, consumable supply rather than component.
  • “Industry insiders say this means that many Japanese-made photography machines currently in operation will face a supply shortage in the short term and could become scrap metal in the long term.” This is an overstatement, as there’s usually a healthy demand for such machines on the secondary market, either to replace a old machine, or to cannibalize for parts, for research fabs, or for someone trying to put together a trailing-edge fab on the cheap.
  • “Unlike the open ban on 23 types of equipment in 2023, Japan is now adopting a gray customs clearance strategy where rather than announcing an outright embargo. It is using case-by-case approvals, indefinite delays in issuing licenses and cutting off parts and technical support, effectively a supply cut off.”
  • The U.S. has also applied pressure on Japan to implement restrictions.
  • “Photoresist is far more complex than it seems.”
  • “First, the shelf life of high-end photo resist is extremely short, often only 6 months or even less. This means it’s impossible to stockpile and if supply is cut off, production lines will immediately shut down.”
  • “Second, the extreme purity requirements. The formula for photoresist contains dozens of chemical substances with each proportion error not exceeding 1 millionth. The metal impurity limit is as low as 0.001 parts per million, like 1 microgram per kilogram. To put this into perspective, imagine eight Olympic swimming pools full of water. If even a single drop of impurity is mixed in, it must be identified and removed.”
  • “This isn’t just a challenge in terms of the formula. It’s a critical test for the entire chemical purification, filtration, transport, and storage process.”
  • “Third, the ecological [I think they mean ecosystem -LP] barrier. Why are Japanese companies so dominant in the photoresist market? Because over the past 30 years, they have developed their expertise alongside semiconductor giants like TSMC, Intel, and Samsung. Producing photoresist isn’t enough. It must be tested on photography machines worth billions of dollars. The verification cycle takes 2 to 5 years with a high failure rate. Without top semiconductor foundaries to conduct these trial and error processes, your photoresist will never make it out of the laboratory.”
  • “Japan’s dominance in the photoresist market dates back to the 1970s when the country’s economy surged. The government and businesses jointly invested heavily in the semiconductor industry, focusing partially on materials.”
  • “In addition to the high technical barriers and lengthy R&D cycles which take years and require immense investment, Japan holds an overwhelming patent monopoly, 70% of related patents globally. It’s virtually impossible to bypass this barrier.”
  • “Major global chemical companies like the US’s DuPont and Germany’s BASF have less than 10% of the photoresist market share. South Korea has tried but still depends on imports for high-end products. Japanese companies are not only technologically advanced, but their strong industrial chain cooperation in photography machines and silicon wafer production makes it nearly impossible for external competitors to enter.”
  • “According to a 2024 Nikki survey, Japan holds the number one market share in three out of five semiconductor material categories, with photoresist being one of them.”
  • China has tried to develop their photoresist, but when they try them out in fabs, their yield rate crashes. Even if China can steal the right formula, they can’t steal all the intermediary steps necessary to produce the formula.
  • “This issue involves a country’s mastery and accumulation of basic materials and processes, which cannot be solved simply by hiring people to steal technology.”
  • “Japan’s precision manufacturing processes are beyond the reach of China.”
  • For the sake of brevity, I’m skipping over an extensive list of other areas of semiconductor technology where China is heavily dependent on Japan.

    • A whole lot of people freaked out over China’s near-monopoly on rare earth minerals, but China is a lot more dependent on the west for a whole lot of things much higher on the technological food chain.

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    Posted in Communism, Foreign Policy, video | 6 Comments »

    Somebody’s Lying About Chinese Exports

    Monday, April 21st, 2025

    According to China, their exports hit a new high in 20204.

    China’s foreign trade hit a record high in total value in 2024 as the world’s second-largest economy further consolidated its top position globally in goods trade.

    The nation’s total goods imports and exports in yuan reached 43.85 trillion yuan (about 6.1 trillion U.S. dollars) last year, up 5 percent year on year, according to data released Monday by the General Administration of Customs (GAC).

    Exports grew 7.1 percent year on year to 25.45 trillion yuan last year, while imports expanded 2.3 percent from one year earlier to 18.39 trillion yuan, the data showed.

    I have my doubts.

    We looked at the situation just under a year ago, and there hasn’t been any shortage of “China is doomed” videos (many from China Observer) depicting the effects of of deep recessions in many of China’s export sectors since then. Video after video shows closed factories, shuttered storefronts, and people complaining about a lack of jobs.

    This one, from a year ago, talks about a drastic decline in Chinese exports:

    Here’s a video on how Microsoft is just the latest western company to pull out of China entirely:

    Or this video from early December, showing how supply chain companies in Guangzhou are failing from lack of business and vast rows of shops are now closed:

    Nor have things improved this year. This video, from two months ago, of a businessman complaining that no one is buying industrial machinery because exports are way down:

    Or this video of Shanghai from five days ago, talking about a 90% decline in foreign investment in China and how lots of shops in Shanghai are closing down.

    Or another video from five days ago, of Yiwu International Trade City already reeling from Trump’s sanctions:

    Somebody, somewhere is lying about the strength of China’s economy and the health of their export sector. Remember, there were already plenty signs of a slowing economy in China before Trump took office. Is China Observer overselling economic difficulties in China? Probably some. Gloom and doom is their stock in trade. You never get any “Everything in China is honky dory!” videos from them (with good reason). But I don’t think they’re making things up from whole cloth.

    Everyone know China’s communist rulers manipulate economic figures to their advantage. There’s a lot of anecdotal evidence that they’re falsifying their export statistics to make things look better than they are. I rather strongly suspect that their hand in the trade war poker game they’re having with Trump is much weaker than they let on.

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    Posted in Communism, Economics, Foreign Policy | 15 Comments »